Value of $100 in 1967, adjusted to 1973

What happened to prices between 1967 and 1973

Between 1967 and 1973, the Consumer Price Index went from 33.4 to 44.4. Cumulatively, prices increased 32.9%, which works out to an average of 4.86% per year. Put differently, a dollar in 1967 bought what $0.75 buys in 1973.

Consumer prices rose 3.1% in 1967, up from 1966’s 2.9% as Vietnam War spending kept climbing alongside expanding Great Society programs, a combination of rising military and domestic outlays that economists later blamed for entrenching inflation through the rest of the decade. The minimum wage rose that February 1, to $1.40 an hour, the first step of a phased increase Congress had set the year before. Urban unrest reached a peak that July, when days of rioting left 26 dead in Newark and 43 dead in Detroit, the deadliest of that summer’s roughly 160 disturbances; Johnson responded by forming the Kerner Commission to study the causes of the unrest. The Supreme Court gained its first Black justice that year too: the Senate confirmed Thurgood Marshall on August 30, and he was sworn in that October after serving as U.S. Solicitor General and, before that, as the lead attorney in Brown v. Board of Education. Consumer prices finished 1967 237.4% above their 1913 level. First-class postage held at 5 cents.

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The destination year: 1973

Consumer prices rose 6.2% in 1973, nearly double 1972’s 3.2%, as Nixon’s wage and price controls were phased out through the year and pressure the controls had been holding back broke loose. The bigger shock arrived that October, when Arab oil-producing states embargoed exports to the United States and other supporters of Israel in the Yom Kippur War. Crude oil, which had traded around $3 a barrel, approached $12 by early 1974, and gas lines became a fixture outside filling stations nationwide. Earlier in the year, the Paris Peace Accords, signed that January 27, ended direct American combat in Vietnam and set a 60-day deadline for withdrawing remaining U.S. troops, even as fighting between North and South Vietnam went on. Financial markets read the year correctly as a turning point: the Dow Jones Industrial Average peaked at 1,051.70 on January 11, a level it would not reach again until 1980, before the oil shock and rising interest rates dragged it into a two-year bear market. A median household earned $10,512 in 1973, a new home sold for a median $32,500, and gas averaged 38.5 cents a gallon, still under half of what the embargo’s effects would bring the following year. Consumer prices stood 348.5% above their 1913 level by year’s end, with the decade’s worst inflation still ahead.

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